OF#25 - Intel, Amazon, and That Thing You Do
Has the computing industry left Intel behind? How does Amazon deliver so many packages every day? And what was my favorite song of 2020?
Hi there, I’m Thomas Najar, and welcome to issue 25 of Open Frame.
This week, we’ll take a look at some developments in the high-tech industry, plus my favorite song of 2020. Let’s check it out!
Intel’s woes
Intel and Windows dominated computing for close to two decades. Everyone saw mobile as the future of computing well before Apple unveiled the iPhone. Apple didn’t exactly close the door on Intel’s future; they still had opportunities to maintain a leadership position. According to Ben Thompson of Stratechery, due to critical shifts in the industry, Intel may now be struggling to stay relevant.
[…] over the last decade the modular-focused TSMC, fueled by the massive volumes that came from mobile and a willingness to work with — and thus share profits with — best of breed suppliers like ASML, surpassed Intel’s manufacturing capabilities.
This threatens Intel on multiple fronts:
Intel has already lost Apple’s Mac business thanks in part to the outstanding performance of the latter’s M1 chip. It is important to note, though, that while some measure of that performance is due to Apple’s design chops, the fact that it is manufactured on TSMC’s 5nm process is an important factor as well.
In a similar vein, AMD chips are now faster than Intel on the desktop, and extremely competitive in the data center. Again, part of AMD’s improvement is due to better designs, but just as important is the fact that AMD is manufacturing chips on TSMC’s 7nm process.
Large cloud providers are increasingly investing in their own chip designs; Amazon, for example, is on the second iteration of their Graviton ARM-based processor, which Twitter’s timeline will run on. Part of Graviton’s advantage is its design, but part of it is — you know what’s coming! — the fact that it is manufactured by TSMC, also on its 7nm process (which is competitive with Intel’s finally-launched 10nm process).
In short, Intel is losing share in PCs, even as it is threatened by AMD for x86 servers in the datacenter, and even as cloud companies like Amazon integrated backwards into the processor; I haven’t even touched on the increase in other specialized datacenter operations like GPU-based applications for machine learning, which are designed by companies like Nvidia and manufactured by Samsung.
What makes this situation so dangerous for Intel is the volume issue I noted above: the company already missed mobile, and while server chips provided the growth the company needed to invest in manufacturing over the last decade, the company can’t afford to lose volume at the very moment it needs to invest more than ever.
In addition to these problems, Thompson cites a shift in the processor industry where design and manufacturing are becoming specialized. Unlike Intel, the leaders specialize in either design or manufacturing, not both.
What we’re witnessing may be the slow-motion disruption and demise of yet another industrial titan.
Amazon’s outrageous complexity
Amazon is an absolute beast in the world of online retail. No other company out there comes close to matching their operation. As mentioned in the video essay below, Amazon processes around 13,000,000 purchases per day.
Somehow, they figured out how to deliver all those orders, and the process is pretty fascinating.
(via David Perell)
Hyperrealism
Over the last year or so, I’ve fallen in love with hyper-realist art. Jeff Bartels’s work is incredible.
(via Kottke)
That Thing You Do
Lido Pimienta is a Canadian Colombian singer/songwriter. The first time I heard Eso Que Tu Haces last year, I was blown away, and it still gives me chills every time.
Tweet of the week
Arnold leads the way.
That’s it for this week folks. Have a great week, stay safe, and remember to be awesome!
Thomas
Love the antique smart phone and the music video!